Trump Issues Executive Orders on Mortgage Credit, Housing Construction

On March 13, President Trump issued two executive orders (EOs) aimed at increasing housing affordability: “Promoting Access to Mortgage Credit” and “Removing Regulatory Barriers to Affordable Home Construction.” The EOs either direct agencies to act or encourage them to consider changes in areas including mortgage finance, housing permitting and construction standards. They were issued one day after the Senate passed the bipartisan 21st Century ROAD to Housing Act by an 89-10 vote. While the bill faces resistance in the House, there remains meaningful support for advancing housing legislation in some form during the 119th Congress.

Mortgage Credit EO Overview

The mortgage credit EO is consistent with the administration’s broader regulatory push to revisit mortgage-related prudential standards, including capital treatment for mortgage assets. The order directs agencies to consider changes to previous rulemakings, subject to applicable law and agency authority.

The stated purpose of the mortgage credit order is to reduce regulatory burdens that have limited access to mortgage credit, particularly for community banks and other “smaller banks,” defined in the order as institutions with less than $100 billion in assets, which includes a large portion of the credit union industry. The order states that it is U.S. policy to improve the availability and affordability of mortgage credit, reduce the regulatory burden on community banks, and foster innovation and consumer choice in the mortgage market.

CFPB

The EO directs the Consumer Financial Protection Bureau (CFPB) to consider a broad set of mortgage rule changes, including amendments to Regulation Z to tailor Ability-to-Repay (ATR) and Qualified Mortgage (QM) requirements under the Truth in Lending Act (TILA); replacing TILA-Real Estate Settlement Procedures Act Integrated Disclosure (TRID) timing rules with a materiality-based standard; exempting small mortgage loans from QM points-and-fees caps or modifying those caps; updating reasonable-compliance standards for ATR and QM underwriting; modernizing rescission rules to accommodate more secure electronic processes; streamlining requirements for rate-and-term refinancing under Regulation X; and exempting rate-and-term refinancing, including cash-out refinancing, from rescission rights.

The EO also directs the CFPB to consider amendments to Regulation C to raise the asset threshold for exemption from Home Mortgage Disclosure Act (HMDA) data collection and reporting for smaller banks, exclude inquiries from HMDA’s scope, and reduce reporting burdens while continuing to protect consumer privacy. The HMDA provision and changes to QM, ATR, TILA and TRID are ordered to only apply to small banks. However, the CFPB may seek to carry this over to smaller financial institutions, including credit unions, that similarly originate and service mortgages.

Smaller financial institutions have been advocating for many of these changes for more than a decade to help reduce regulatory burdens. Many of the mortgage-related rulemakings were issued under statutory deadlines set by the Dodd-Frank Act and, as a result, were developed on compressed timelines. Revisiting those final rules likely presents an opportunity to make meaningful improvements. The CFPB is currently working on proposals to amend servicing rules under RESPA and TILA, per the CFPB’s Spring 2025 regulatory agenda.

FHFA

The EO directs the Federal Housing Finance Agency (FHFA) to consider a series of changes to the activities of the Federal Home Loan Banks (FHLBanks). These include:

• Modernizing collateral valuation and transfer systems between the Federal Reserve and the FHLBanks;
• Expanding access to longer-dated FHLBank advances tied to residential mortgage assets;
• Creating targeted FHLBank liquidity programs for entry-level housing, owner-occupied purchase loans and small residential builders;
• Accelerating collateral boarding and valuation through standardized data and digital documentation; and
• Refocusing the FHLBanks’ Affordable Housing Program (AHP) to execute more quickly and provide greater financial leverage for small-scale and owner-occupied housing projects.

FHFA must also submit a report within 120 days on the efficiency of national housing finance markets and recommend regulatory or legislative changes to address any issues identified.

The EO further directs FHFA and the Federal Reserve to consider authorizing the FHLBanks’ intermediate access to the Federal Reserve’s discount window for FHLBank member depository institutions. The concept reflects a longstanding policy concern that during times of crisis banks often turn first to FHLBank advances, rather than the discount window, because FHLBank funding carries less of a stigma and is generally easier to access. The Government Accountability Office (GAO) raised this in a December 2025 report, which Brownstein analyzed in this recent client alert.

Interagency

The EO also directs the Federal Reserve, CFPB, the National Credit Union Administration (NCUA), the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) to consider revising capital regulations to better align mortgage-related risk weights with the material credit risk of the exposure, including for portfolio mortgages, servicing rights and warehouse lines of credit. This provision comes as banking regulators prepare to release their revised Basel III proposal, which is expected to tailor capital requirements and reduce risk weights for mortgages, seeking to incentivize bank mortgage origination and servicing.

The EO also directs regulators to consider revising supervisory guidance to exclude one-to-four-family residential development and construction lending from commercial real estate (CRE) concentration guidance and to ensure supervisory expectations support responsible construction lending by community banks.

The order also directs the banking regulators, NCUA, CFPB and FHFA, to modernize appraisal regulations and guidance to expand the use of alternative valuation models (AVMs), desktop and hybrid appraisals, and artificial intelligence valuation tools. This includes simplifying appraiser qualification requirements and reducing appraisal requirements for low-risk transactions. The Senate’s 21st Century ROAD to Housing Act includes certain similar provisions that would deal with appraisal process reform and appraiser qualification simplification. The Department of Housing and Urban Development (HUD) and Department of Veterans Affairs (VA) are also instructed to consider aligning appraisal standards between the Federal Housing Administration (FHA) and the VA Home Loan program.

The EO also promotes digital mortgage modernization, as the Department of Agriculture (USDA), HUD, VA and FHFA are directed to consider eliminating unnecessary wet‑signature requirements for disclosures, applications and closing documents and standardizing acceptance of electronic signatures, e-notes and remote online notarization. The EO also includes an enforcement section encouraging agencies to consider policies discouraging civil money penalties except for willful, knowing or reckless violations and allowing institutions a reasonable opportunity to self-identify and remediate appropriate compliance issues. Finally, the EO directs regulators to consider eliminating duplicative or unnecessary mortgage loan officer licensing or registration requirements for smaller banks.

Housing Construction EO Overview

The accompanying housing construction EO takes a similar deregulatory approach, this time in order to increase supply and decrease impediments to construction. It states that housing affordability has been constrained by unnecessary regulatory barriers, slow permitting processes and costly mandates that delay construction and increase the cost of new housing. Unlike the mortgage credit EO, which repeatedly states that it “shall consider” implementing the provisions, this EO more often directs agencies to review, revise, assess or develop guidance.

The EO directs the Army Corps of Engineers and the Environmental Protection Agency (EPA) to review and revise requirements related to stormwater, wetlands, lakes, rivers and other bodies of water. The stated purpose is to reduce housing construction and ownership costs, streamline regulatory and agency decision-making processes, reduce property tax burdens and increase insurability.

The EO also directs the Department of Commerce, HUD, the Department of Transportation (DOT) and FHFA to consider eliminating or reforming rules and programs that constrain residential development focused on affordable single-family homes and non-urban development. The EO specifically identifies the Economic Development Administration’s density-related guidance, DOT’s Reconnecting Communities Pilot Program, HUD’s Pathways to Removing Obstacles to Housing Program, and FHFA’s guidelines regarding chattel lending for manufactured housing and incentives for low-balance home mortgages.

On energy-efficiency mandates, USDA, HUD, the Department of Energy (DOE) and FHFA are directed to take action, where appropriate, to reform or eliminate burdensome energy efficiency, water use and alternative energy requirements affecting housing, including manufactured housing.

The EO also takes aim at federal permitting. It directs the Council on Environmental Quality (CEQ) to issue guidance on implementing the National Environmental Policy Act (NEPA) in a way that maximally exempts or reduces burdens on housing construction, preservation, adaptive reuse and related infrastructure, including through categorical exclusions. It separately directs the Advisory Council on Historic Preservation (ACHP) to develop similar guidance under section 106 of the National Historic Preservation Act (NHPA). This closely tracks the 21st Century ROAD to Housing Act’s broader emphasis on streamlining environmental review and accelerating housing production.

Within 60 days, HUD, in coordination with the White House Domestic Policy Council, must develop regulatory best practices for state and local governments to promote housing construction and affordability. The list of items is broad, including permitting, energy efficiency requirements, reexamining restrictions on manufactured and modular housing, and removing growth boundaries, moratoria and similar limits on housing development beyond urban centers.

The EO also directs the Department of the Treasury and HUD to evaluate ways to better align federal programs and incentives with Opportunity Zone tax incentives to expand investment in single-family home construction, including by linking grants, financing tools or other incentives with Qualified Opportunity Funds (QOFs) engaged in single-family development and sales. The Treasury Department and HUD are also directed to assess coordination between Opportunity Zones and the New Markets Tax Credit (NMTC) in qualifying census tracts.

Next Steps

The two EOs are an important opportunity for financial institutions, the home loan bank system and other lenders and housing providers to reshape the regulatory environment.

The March 12 Senate passage of the 21st Century ROAD to Housing Act gives the administration a second track to enact housing reform. However, House Republicans have raised concern with the bill’s institutional investor language, build-to-rent (BTR) prohibitions and other provisions, signaling that a formal or informal conference between the House and Senate may be needed before a final package is sent to the president.

Brownstein is actively engaged on all of these issues and is well-equipped to help draft comment letters, engage with regulatory agencies and Congress to shape the landscape for housing affordability.

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